Company founders can be as young as their teens or as old as their 80s. But is there an ideal age you should be when you start a company? It turns out there is, and it’s older than you may think.
Those are the results of surprising new research by the National Bureau of Economic Research (NBER). Rather than surveying a representative sample of entrepreneurs or asking expert opinions, an NBER research team actually assembled Census Bureau data and looked at hundreds of thousands of successful startups, especially those with rapid growth.
What they found was not what you might expect. Bill Gates started Microsoft at 20. Steve Jobs was 21 when he and Steve Wozniak started Apple Computer. So you might logically think that the most successful fast-growth companies are started by very young founders who are unfettered by convention and unwritten rules, able to take risks, and unafraid to shake up the old order.
But that isn’t true. In fact, the researchers found, the average age of a successful startup founder is about 42. When it comes to high-growth super successful startups, the average age is even older. When researchers looked a the top 5 percent of rapid-growth startups, they found the average founder age was 42.1. Narrowing their focus to the top 1 percent, the average age was 43.7. When they looked at the top 0.1 percent of fast-growing startups, founder age went up to 45. Contrary to popular belief, they concluded, youth is a disadvantage when it comes to creating a high-growth startup.
But there is one time when youth is an advantage in the startup world–when you’re pitching your company to VCs. The youngest successful founders were those who had received funding from New York-based venture capital firms, although even then their average age was 38.7–old enough to have been Mark Zuckerberg’s grandparent when he started Facebook from his dorm room at 19.
Wait a sec. Aren’t VCs supposed to be looking for the highest-growth companies to fund? Isn’t that their mantra? They’re all but certain to lose money on the majority of startups they fund, so don’t they need those high-growth successes to make the endeavor worthwhile? So why are they funding startup whose founders are still too young to deliver the high growth VCs crave?
Because, whatever they may say, VCs aren’t using data to make their funding decisions, as TechCrunch notes. Instead, they’re going by look and feel, and the look they’re going for is typified by Mark Zuckerberg: young, white, male, privileged, and from an elite university. VCs implicitly admit that they’re ignoring the data with the often-repeated comment that they bet on the founder, not the business. This is why female founders still only receive about 2 percent of the funding VCs provide, even though the data shows that startups founded by women have greater odds of success.
VCs’ disdain for data is ironic, given that the most successful startups–think Google, Facebook, and especially Amazon–seem to owe their phenomenal growth to their practice of carefully gathering data and to strictly following that data wherever it leads them. Perhaps one day VCs will start doing the same. In the meantime, it’s nice to know that if you’re in your mid-40s, it might be tough to get venture capital funding–but if you start a business there’s a good chance it will do just fine.